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The Unicrunch — The changing media landscape is the message
Sami Vukelj
•5 min read
The Unicrunch is our US private credit newsletter, in which we break down everything from unitranches to ABL lending. Find out more about 9fin for private credit, and sign up for the newsletter below.
Card carrying private credit
The ubiquity of screens is not just a recurring headache for parents, but for financiers and lenders alike.
For while TikTok comes to have a dominant presence among the nation’s youth, mediums such as trading cards are simultaneously garnering a new, niche fan base among Gen Z, while cinema proved its enduring popularity as millions made their way to the ‘Barbenheimer’ event.
Headline narratives covering the death of one thing and the ushering of a new never account for it not being a clean split in eras — one form of media simply doesn’t expire overnight. And that’s a question for lenders trying to game out opportunities in such transitional periods, while also avoiding being caught out from transitions.
Beckett Collectibles has come to the market this week, seeking a $250m refinancing, 9fin reported. The company specializes in authenticating and grading sports cards, particularly baseball, basketball, football, and other sports, as well as memorabilia such as baseballs and autographs — a different type of asset to the tech and healthcare investments direct lenders like to underwrite.
Children debating and swapping baseball cards is the image today of a bygone era, but the thrill of catching a foul ball at [insert your favorite baseball team’s stadium here] seemingly never gets old. Beckett has a focus on authenticating the truthfulness of such objects and enables a burgeoning economy of buying and selling rare items on platforms such as eBay.
Existing lenders HPS and Freedom 3 backed the company in 2022, and since then the company has undertaken a modernization of its servicing, partnering with Palantir while also making a number of acquisitions. Typically, Independence Day holidays could be disruptive to a refinancing effort. But for Beckett, the burst of seasonal enthusiasm for baseball and broader Americana may come at a welcome time.
Meanwhile, BondIt Media, film financier, got a $100m accordion facility over the line from Keystone National Group, 9fin reported. As the company CEO told 9fin, it has had to overcome rate hikes and worker strikes, all under the shadow of the broader streaming transition.
But the company only sees growth on the horizon with funds due “to help power the next chapter of our growth” said Matthew Helderman, CEO of BondIt Media in a statement to 9fin.
That chapter is looking a little rosier this year. As recent successful openings for ‘Inside Out 2’, ‘Bad Boys: Ride or Die’, and the latest in the ‘A Quiet Place’ series show there is appetite to get out to the cinema and avoid (at least here in New York) the stifling heat. Whether that appetite persists amid superhero fatigue and then beyond TikTok’s ever expanding presence remains to be seen for Keystone and others involved in the financing.
Numbers will wash
Roll up, roll down, rolls left and right. Every two weeks you need to take your car through this foamy routine, the experts say. And if you don’t have a membership with one of the many PE-owned car washes out there, then the costs will pile up. Suds to be you!
Earlier this week, we looked into what is bubbling up in the car wash sector to attract PE and PC firms.
It turns out: a lot. The first is the relatively high degree of fragmentation, which lends itself to the type of roll-up strategies that PE firms specialize in. Then there’s the scalability of these businesses and the presence of clear and quantifiable synergies that come with growth.
Costs have also come down as the industry has become increasingly automated, with fewer employees required to run the largely automated tunnels that have come to replace the more traditional bays.
The industry also offers strong margins: while it’s not an apples-to-apples comparison, Mister Car Wash— a public company that is much larger than most PE-backed competitors — showed LTM EBITDA margins of 30.9% in its latest earnings.
And lest we forget the exits: PE sponsors can typically expect to sell these investments for mid-teen multiples. All of these attributes have created a space that is favored by lenders and sponsors, but that’s also created some extra considerations for players looking to succeed in the increasingly competitive space.
It’s gearing up for a hot summer here in NY, but there seems to be no drying up of opportunities in the car wash space.
Wastequip — the company is looking to refinance its existing public debt facilities in the private credit market
Priority Power — the energy management services company is on the block with an $85m LTM EBITDA. Warburg Pincus has expressed interest
Beckett Collectibles— HPS and Freedom 3 backed the company back in 2022 as it underwent a digitization of its services, but is now looking to refi the existing $250m debt package
8th Avenue Food & Provisions— private credit firms are in talks to refinance the company’s existing BSL facilities
Higginbotham — the insurance agency returned to the market not long after securing an add-on to this time shave 100bps of its existing term loan
Quantum Design— PE firm Carson Private Capital is in talks with private lenders to fund its LBO of the lab equipment maker, which generated $20m in LTM EBITDA
